A 3- year fully amortizing constant payment mortgage loan

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Reference no: EM13381230

A 3- year fully amortizing, constant payment mortgage loan for 320,000 is to be made with an interest rate of 5%. Construct a loan amortization table and answer the following questions.

A. whats the monthly payment

B. How much is the borrowers income tax write off in the first year?

C. if the borrower wants to prepay this loan at the end of year 8, whats the outstanding balance that he needs to pay off at end of year 8?

D. what is the effective interest rate if the lender charges the borrower 1 points and the borrower keeps the loan until its maturity?

E. suppose another lender is offering a loan of 4.75 interest rate with 2 points. is that a better deal.

Reference no: EM13381230

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